Mohammed Saidul Islam
Government policy support is necessary for easier and safer use of liquefied petroleum (LP) gas by households, motor vehicles and industries to cope with the increasing demand for gas, a top industry executive said Wednesday.
"Though there has not been any study to find out the demand for LP gas in the country, as a market player we assume that the demand is huge and it is increasing. We need proper policy support to meet the demand," said Laugfs Gas Bangladesh Director and Chief Executive Officer (CEO) Mohammed Saidul Islam.
In an interview with The Financial Express recently, he said the country has limited reserve of natural gas. But the demand for the same is increasing everyday because of increased urbanisation and expansion of the economy.
"Instead of facilitating consumption of the fast depleting reserve of natural gas by a limited number of people, the government should strike a balance between the prices of domestic natural gas and imported LPG to help expand the use of LPG across the country," he said.
Mr Islam thinks the country's people will be benefited from such a move.
He said many households avoid using LPG because of the initial investment. A household primarily needs to invest between Tk 8000 and Tk 9000 for a cylinder and some other things.
"Though LP gas has zero import duty, cylinder and some other things like hosepipe, valve and regulator have very high duty ranging from 30 per cent to 90 per cent. If these duties are brought down to zero, the initial cost of using LP gas will also be cheaper," he said.
He also stressed on the need for regulating local manufacturers and importers of cylinder and other things for safety reasons.
"Absence of legal measures to regulate the manufacture such products could cause huge loss to life and property," he said.
Petredec Elpiji Ltd, predecessor for Laugfs Gas, is pioneer in introducing the auto-gas for motor vehicles in Bangladesh.
Mohammad Saidul Islam said they want to expand the use of auto gas in the country, but the government policy remains a barrier. The company has currently eight LPG stations across the country.
"Some 4,00,000 to 5,00,000 petrol and octane-run motor vehicles could be converted for use of auto gas in the country. The market is huge but currently some 4000 to 5000 motor vehicles are running on auto gas due to lack of necessary filling stations," he said.
Under present policy, the distance of auto-gas re-fuelling stations and conversion workshops from one to another should be at least two kilometres in city corporation and district-town areas if they are located on the same side of a road. It should be at least four kilometres for other areas.
For the opposite side of any road, the distance between two auto-gas re-fuelling stations and conversion workshops should be at least one kilometre in city corporations and district towns, while it should be at least two kilometres for other areas.
He said this distance should be lessened for the city corporation areas.
Sri Lanka-based Laugfs Gas acquired Petredec's Bangladesh assets and liabilities in October 2015.
He said petrol and octane-run motor vehicles could save up to 30 per cent cost by converting their vehicles to auto gas.
Mohammed Saidul Islam said currently the market has 10 players including a state-owned one. Many players are interested to come in the market. If the government eases policy they would surely come.
Mr Islam said Laugfs Gas is currently setting up 35,000 metric tonne storage at Hambantota in Sri Lanka.
"Bangladeshi clients and companies will be benefited from the new facility. They would need three to four days to bring gas from Hambantota compared to eight to nine days usually taken to carry gas from other places," he said.
LAUGFS Gas Bangladesh, formerly known as PetredecElpiji Limited, is one of the largest LPG distributors in Bangladesh, importing and distributing over 50,000 MT of LPG every year.
Being the only 100 per cent foreign-owned entity, it has entered the LPG downstream industry of Bangladesh in 2001 with the brand name of Kleenheat Gas.
Mr Islam said Laugfs Gas has grown rapidly over the years, establishing an expansive distribution network across the country with an annual turnover exceeding USD 38 million.
LAUGFS presently operates a world-class LPG import, bottling and distribution facility in Mongla Port with a storage capacity of 1,800 MT and in the process to extend further.
LAUGFS Gas Bangladesh is a part of LAUGFS Gas PLC, a fast expanding energy conglomerate in the region and a part of the diversified multinational LAUGFS Holdings Ltd.
With over 4,000 employees and an annual turnover exceeding USD215 million, LAUGFS has a strong presence across 20 industries in the power and energy, retail, industrial services, leisure and the real estate sectors.
LAUGFS has an extensive regional presence in power and energy with LPG downstream activities of LAUGFS Gas, logistics services provided by LPG vessels owned and operated by LAUGFS Maritime, renewable energy operations of LAUGFS Power and petroleum retailing by LAUGFS Petroleum.